It has been an interesting week for social media in the courts.

Two defamation cases have reached their conclusion, both involving Twitter. One involved Australia’s Treasurer Joe Hockey suing Fairfax Media, the other, Lynton Crosby and Mark Textor, of Crosby Textor, suing Federal Labor MP Mike Kelly.

The Kelly case ended in an anticlimax with an apology after four long years in the courts, but more on that later.

The case that really captured imaginations was the case of the Treasurer and Fairfax.

Joseph Hockey v Fairfax Media Publications Pty Limited and Others [2015] FCA 652

The Federal Court judgment in the Hockey-Fairfax defamation fight is a significant development in Australian social media law and while it provides some answers, it has also highlighted issues with the interaction of social media and existing defamation laws that were never designed with social media in mind.

Free speech and the politics of defamation

The first observation I would draw about this matter is a level of concern about defamation laws being used by a politician against the media in Australia. Australia prides itself on being a liberal democracy. Although we do not have freedom of speech expressly enshrined among our freedoms like the United States, and we are subject to legal limitations, we do consider ourselves a nation that cherishes and protects free expression, even if from time-to-time confusion reigns as to what that exactly entails.

Our media has a long and proud tradition of being, by and large, fiercely independent and this has been accommodated by a convention of freedom from political interference, barring some recent troubling interjections in relation to the ABC.

Nevertheless, the Hockey proceedings do have worrying shades of Singaporean politics about it, where it is common for politicians to use defamation law to silence political dissent and opinions. Having said that, I’m confident that our culture and political system are sufficiently robust to protect Australia from any serious political abuses of defamation law.

Win or loss?

Second, some reporting of the judgment seem to indicate a huge victory for Mr Hockey. On a closer examination of the decision, I would argue against that conclusion on the basis the court only upheld a relatively small proportion of Mr Hockey’s claims, specifically only those which related to a poster and a tweet.

The judgment also highlights the need to consider whether changes are necessary to our defamation laws to reflect the realities of social media, especially ‘microblogging’ social media services, such as Twitter, where significant character limitations exist and messages must often be heavily truncated.

The case before the court involved three articles published in Fairfax Media newspapers, The Sydney Morning Herald (SMH), The Age and The Canberra Times (TCT). The articles noted that Mr Hockey provided ‘privileged access’ to a ‘select group’ in return for donations to his political party, the Liberal Party of Australia, via a ‘secretive’ fundraising body called the North Sydney Forum, whose activities were not fully disclosed to election funding authorities.

Apart from the print version of the TCT, each article was published under the prominent headline ‘Treasurer for Sale’ or ‘Treasurer Hockey for Sale’.

The SMH also promoted the article with a poster featuring the ‘Treasurer for Sale’ headline.

The articles were also published online and to a range of Apps and electronic devices and pushed to social media, including a tweet by The Age, consisting of the headline and a link to the article online. When readers clicked on the ‘View Summary’ option offered by Twitter, they were further presented by the following headline and a short ‘summary’ of the article:

Treasurer for Sale: Joe Hockey offers privileged access

Treasurer Joe Hockey is granting privileged access to a select group of business leaders in return for political donations totalling hundreds of thousands of dollars each year.

Mr Hockey alleged the articles, in print, online and in various other electronic formats, the poster and the tweet conveyed defamatory imputations about him:

• corruptly soliciting payments, or accepting, or being prepared to accept, bribes to influence decisions he made as Treasurer; and
• corruptly selling privileged access to himself to a select group of business people and lobbyists for donations to his party.

The court only found for Mr Hockey in respect of:

• the SMH poster; and
• the tweet posted by The Age – but only in respect of two out of three considerations;

and awarded damages in the sums of $120,000 and $80,000 respectively. These sums need to be considered in context of the cap of $366,000 available to Justice White, separately in respect of the SMH poster and The Age tweet matters.

In short, the court found that the print and online articles and headlines published by Fairfax were not defamatory because the articles did not convey the defamatory imputations alleged and the headlines were put in sufficient context by the entirety of the article following them.

Conversely, the poster’s headline, separated from the context offered by the articles, did convey a defamatory imputation to those who did not read the SMH article.

The tweet by The Age sparked three separate considerations.

First it was considered in the context of as it appeared in the first instance on Twitter: headline and ‘bare’ link. In this context the tweet fell foul of the same considerations as the SMH poster. His Honour found that divorced from the context the article offered, the tweet conveyed a defamatory imputation, ‘the same defamatory meaning as did the SMH poster,’ because many people may look at the tweet ‘without going further’, never clicking on the link to read the article and thus would be left with the impression made by the headline, without the context offered by the linked article.

The second consideration looked at the tweet in the context of readers who clicked the ‘View Summary’ option. In this context, with the summary opened, the court still found for Mr Hockey:

In my opinion, the ordinary reasonable reader reading only the second Twitter matter would have understood it to be making an allegation in terms of the additional pleaded imputation. Such a reader would have understood the summary to be indicating that MrHockey was providing access of a privileged kind in consideration for substantial political donations and, further, that the privileged access was available only to a select group of business leaders. My reasons for that conclusion are similar to those given in relation to the SMH poster.

In my opinion, ordinary reasonable readers would have regarded that as corrupt conduct. Mr Hockey’s claims succeed in relation to the second Twitter matter.

Finally, there was a third consideration relating to the tweet, where the tweet was considered in the context of the full text of the article linked. In that context the court found that Mr Hockey’s claim fails:

However, in my opinion, Mr Hockey’s claims fail in relation to the third Twitter matter read in conjunction with the hyperlinked article. The initial understanding of the reader on reading the summary itself would, for the reasons just given, have been that Mr Hockey was engaging in corrupt conduct. However, when the reader read the Nicholls article, that understanding would have been dispelled. For the reasons given earlier, the ordinary reasonable reader would have understood that they were being informed about a form of political fundraising by an entity associated with Mr Hockey in which access to Mr Hockey was a principal attraction. The reader would have readily understood that it was not a case of Mr Hockey making access to him conditional upon a political donation being made, or of him imposing an expectation of payment, let alone that Mr Hockey was soliciting payments having some relationship to the decisions he was to make as Treasurer.

Justice White accepted that the circumstances surrounding the publication of the articles supported the allegation of malice against an SMH employee involved, and that the malice is attributable to the SMH:

Exercising the caution which is appropriate before making a finding of this nature, I am satisfied that Mr Goodsir’s animus towards Mr Hockey had not abated by 4 May and that the publication of the printed articles in the SMH was predominantly actuated by that improper purpose.
…
There is no difficulty in attributing Mr Goodsir’s purpose to the SMH. This means that, had I regarded the printed articles and the website articles of the SMH as conveying a defamatory imputation, I would have found that the defence of qualified privilege, even if otherwise available, was defeated by his improper motive.

However, that malice did not extend to the other Fairfax Media publications involved, including The Age.

In the context of considering the damage to Mr Hockey’s reputation Justice White noted that:

On my findings, Mr Hockey is entitled to damages in respect of the defamatory imputations in the SMH poster and in the first two of The Age Twitter matters.
…
An assessment of damages for defamation serves three purposes: consolation for personal distress and hurt; reparation for damage to the applicant’s reputation (including if relevant the applicant’s business reputation); and vindication of reputation …
… on my findings, Mr Hockey is entitled to damages only in respect of the hurt and harm caused by the SMH poster and the first two Twitter matters.
An important consideration bearing upon the element of reparation for damage to reputation is that Mr Hockey does not appear to have suffered any diminution of reputation among his parliamentary and ministerial colleagues arising from the publications. He continues as the Federal Treasurer. There is no evidence of any suggestion that he should step aside because of the matters revealed in the publications or while some investigation of his conduct is undertaken.
….
… I reject the submission that aggravated damages are warranted on this account.

The parties will now make submissions on relief by way of injunctions, interest and costs.

In light of the judgment it is clear the relevant articles will be able to remain online as they have been found not to be defamatory. The SMH poster involved was temporary in nature, and was used only for a day or two to promote that particular edition of the paper as is usual with such posters. This leaves only the tweet by The Age.

The costs wild card

As for costs, that’s where things will get really interesting. The $200,000 judgment for Mr Hockey may not be the ‘windfall’ most people saw when the judgment was handed down. This is because although in litigation costs will usually follow the event, meaning that the successful party has a ‘reasonable expectation’ of being awarded costs against the unsuccessful party, the court has relatively wide discretion when it comes to awarding costs.

For example, the court can make so-called ‘differential costs orders‘ in circumstances where the ‘winning’ party failed on one or more issues at trial. The court has the discretion to disallow the ‘winning’ party from recovering costs that relate to such issues and, in some circumstances, may also award costs to the ‘losing’ side in respect of them.

Mr Hockey had failed in his defamation case on a number of issues, as none of the newspaper and online publications of the three articles in question were found to be defamatory.

If one accepts that a sizeable portion of the legal costs incurred by both sides would have been incurred in relation to the three articles, there is a possibility of a differential costs order being made by the court. This would mean that Mr Hockey would not be able to recover a substantial portion of his costs. Further, he could find himself liable for Fairfax’s costs in respect of those issues. That could be quite catastrophic in financial terms.

Let’s presume both sides spent $1 million in legal costs. If the court decides that the issues on which Mr Hockey had failed at trial amounted to 60% of his legal costs, and he can only recover the remaining 40% from Fairfax, Mr Hockey would be left at least $400,000 out-of-pocket overall. Even after taking the $200,000 defamation payout into account.

You should also know that usually no litigant recovers the entirety of their costs due to a number of costs assessment factors. The average rate of recovery is often closer to 50-70%, depending on the circumstances and the basis of the costs order.

In the event the court ordered Mr Hockey to pay Fairfax’s costs in respect of the issues on which he was unsuccessful at trial, which is not entirely outside the realm of possibility, those numbers would suddenly become far worse. Admittedly, the finding of malice by Justice White on the part of Mr Goodsir may temper the likelihood of such an outcome.

Such are the vagaries of high-stakes litigation. So watch this space …

Social media and our defamation law

As noted above, this case also raises interesting questions about the interaction of social media, particularly Twitter, and defamation law. It is somewhat counterintuitive to many that the tweet in question was found defamatory in the two out of three contexts considered by the court. The judgment highlighted and confirmed there are long-term issues for users of social media in a defamation context that will have to be addressed by the legislature.

In the context of Twitter, where users are limited to 140 characters, it is arguable that the default position in defamation law should be for Twitter posts to be considered in the context of a linked article. In this case when the tweet was considered in that context, it was found not to be defamatory.

When the Defamation Act 2005 (NSW) was enacted social media was not a consideration and perhaps it is now time to review the provisions of the Act, to take into account the nature and limitations of this new medium. I am not advocating any rush changes to the law, but this case is a timely reminder of the need for a considered review of the law in light of technological changes.

For example a review could consider whether:

• an American style ‘public figure’ doctrine exception in our defamation laws would benefit our democracy – such a doctrine in Australia would have knocked out the Hockey case; and
• the recently reviewed defamation laws of the United Kingdom could offer any valuable guidance in the Australian context.

Lynton Crosby and Mark Textor v Michael Kelly

This case ended this week with an apology from Labor MP Mike Kelly. Ironically, there has been an offer on the table from the beginning and the case would never have been lodged if Mr Kelly apologised, but he refused and continued that refusal for years after the case was commenced.

Although the final outcome of this case was a huge anticlimax from a legal precedent perspective, the dispute provided plenty of excitement over the years:

• Crosby v Kelly [2012] FCAFC 96 (2 July 2012);
• Kelly v Crosby & Ors [2013] HCATrans 17 (15 February 2013); and
• Crosby v Kelly [2013] FCA 1343 (11 December 2013).

At one point a somewhat exasperated Federal Court Justice Rares reportedly referred to the case as ‘bigger than Ben Hur’.

Crosby Textor is a social research, corporate strategy and political polling firm. Its founders in 2002 were Lynton Crosby, who previously was the State Director for the Queensland Division of the Liberal Party of Australia, and Mark Textor, a conservative political campaign and corporate strategist and social researcher.

In 2011 Mr Kelly sent a tweet which accused Crosby, Textor, Steal & Gnash, as Crosby Textor was known at the time, of introducing ‘push polling’ to Australia. ‘Push polling’ involves the use of loaded questions to achieve a predetermined outcome in a poll, and it is considered to be a highly unethical method:

@MikeKellyMP @latikambourke@markatextor always grate [sic] to hear moralizing from Crosby, Textor, Steal & Gnash. The mob who introduced push polling to Aus.

Engaging in such a technique would be a poor professional look for a reputable polling company, thus with those few words a four-year saga begun. It didn’t help the case that there was an undercurrent of opposing political ideology between the two camps.

In the end Mr Kelly issued a statement offering an apology:

In October 2011, I suggested in a message to my followers on Twitter that Crosby Textor had introduced push polling to Australia.
I acknowledge that this is untrue.
I accept Mr Cosby’s and Mr Textor’s assurances that they have not engaged in push polling at all.
If my tweet was understood to suggest that they had engaged in push polling, then I apologise to them.

And with those few words the four-year saga reportedly came to a conclusion, although the question of legal costs remains unclear. No doubt significant costs would have been incurred by both sides. While it is understood the Labor Party was covering, or at least contributing to, Mr Kelly’s costs in the course of these proceedings, one would presume the other side would now be looking at recouping at least some of their costs from Mr Kelly. That could cost a pretty penny for the Labor Party if they are still on board.

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_{*’The Twitter bird’ feature image sourced from Andreas Eldh under Creative Commons Attribution 2.0}